While It Pays To Be A Real Whistleblower, It Also Requires Courage

A recent announcement by the Securities and Exchange Commission (SEC) shows the continued rewarding of whistleblowing in the United States. An additional payment of $150,000 to the first-ever Dodd-Frank whistleblower was announced recently by the SEC. The whistleblower had already received an award of $50,000. The SEC will collect additional money from Defendants in this case. As we have reported, individuals who “blow the whistle” can receive an award between 10 and 30 percent of the total amounts collected. The SEC case underlines the importance of companies revisiting their internal corporate compliance programs to ensure that appropriate and credible measures are in place for a person to report wrongful conduct, without fear of retaliation. It’s believed that having a strong internal reporting system in place may encourage individuals to use internal reporting instruments prior to reporting to the SEC.

The whistleblower in this case has now been awarded a total of nearly $200,000 since the first award was announced in August 2012. This whistleblower helped the SEC stop a multi-million dollar fraud by providing documents and other significant information. The SEC stated at the time that the award was based on the amount the SEC had collected thus far.

As we previously reported, the SEC whistleblower award program was created three years ago by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The SEC is authorized by Congress to issue financial awards to individuals who come forward with high-quality information that leads to an SEC enforcement action in which more than $1 million in sanctions is ordered. Before the program started, the SEC could only reward individuals who provided information on insider trading.